[Internal report shows Detroit's first three quarters of 2007]
That's a screenshot I cobbled together from an internal Gannett report, the appropriately titled Cost & Statistical Summary, for the first three quarters of 2007 (periods 1-9). These monthly reports tracked the company's U.S. dailies across 50 or so different revenue and spending categories; I don't think they're published anymore.
The reports disclose one of Gannett's most closely guarded secrets: profit margins at the company's community newspapers, which next week are expected to lay off perhaps thousands of employees across the country.
Yesterday, I breezed through two of these reports, covering what looks like every Gannett newspaper, except USA Today, for most of last year and all of 2006. The slice above shows Detroit -- principally, the Detroit Free Press. A Gannett Blog reader gave me a copy of the reports, under two conditions. The reader asked to remain anonymous, citing possible repercussions if they were identified. And they asked that I not share copies with anyone. (The detail above is purely for illustration.)A rare peek inside
Although the 2007 report is a year old, it nonetheless offers a rare point-in-time snapshot of the financial performance of individual papers as they entered what turned out to be a devastating 2008.
I've put Detroit up on the whiteboard as an example, and a starting point. This is the first time I've seen one of these reports, so I'm once more reaching out to the retired publishers and controllers among my readers who've helped in the past. First, I'll tell you what I think the data show -- then please correct me where I'm wrong. Once I've mastered Detroit, I can report some figures for more than 80 other papers.
What I see
Detroit was losing money by the end of last year's third quarter. (Surprising: I thought only some of the New Jersey papers were in the red.) Profit margin sank to a negative 4.96% vs. a barely positive 0.31% a year before. In fact, it shows Corporate wanted Detroit to raise its margin last year -- to 2.01%. Question: Are these figures for the Free Press and the Detroit News -- or just the Freep?
The culprit, no surprise: plunging ad revenue. (Subscription sales and other circulation revenue aren't provided for any paper.) Detroit sold $164.8 million in ads in the first three quarters, down 15% from $192.7 million a year before, the report shows. Corporate had budgeted $190.2 million.
So, how did I do?
Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.
[Image: today's Freep front page, Newseum]
Jim - Please name a few of the high-profit margin papers that you have for those periods as well as some of the ones who declined significantly in year-to-year profits (dollars better for that example) as more than a few people might be surprised at the names and numbers.
ReplyDeleteBinghamton's numbers were one of my favorites to review as they had high margins and a significantly poor paper in terms of print quality...money that should have been spent in that market years earlier to improve their presses.
Who will be foolish enough to comment on this from work?
ReplyDeletePut a list of all the papers and how much they made or lost
ReplyDeleteSo Detroit was losing money yet they have no layoffs
ReplyDeleteJim, Can this data throw any light on a debate on this blog in recent days, involving how much USAT is raping local papers for printing and distribution?
ReplyDeleteI cannot beleive someone would leak this information!
ReplyDeleteI'm a former employee but wouldn't ever do anything so stupid.
The company sucks but I would never do anything like this although I had access to all of these same reports.
By the by Detriot reports to Moon because he suppose to soooooo good at fixing things. Doesn't look like much is happening huh?
If you are looking for profitable papers go smaller and look in markets that don't have the big gains or losses from real estate, employment, major retail etc.
Is this newspapers only? I'm really curious to see what the TV Stations pull in, if you had it. KUSA was always the most profitable, but that was before the idiots at corporate took away our website and enforced MetroMix on us...
ReplyDeleteThis is fantastic reporting Jim. Obviously you have earned -- and deserve -- the trust of insiders, and I hope they provide some goodies from 2008. Gannett has never considered its individual properties to be "material" enough to break out their financial performances, even though worker raises, hiring and layoffs are based on those numbers. Gannett has sucked the life out of its properties for so long by siphoning out excess profits, shareholders and employees (and advertisers and readers for that matter) have a right to see what kind of numbers those properties are putting up.
ReplyDeleteYes, Jim. These figures are for the Free Press AND the News. Gannett runs everything in the operation except for the newsroom of The Detroit News. And Gannett has veto power over the News' budget. It's certain that the Detroit Media Partnership (of which Gannett owns 95 percent) lost even more money this year.
ReplyDeleteOK -- good work beyond the call of unpaid duty -- you get a sawbuck today. But why not just post the data and let us help you with it?
ReplyDeleteI agree. Considering what has gone on during the last two months makes these figures from period 9 (September) even more startling. This includes weeks when ads were down, but hardly down to the extent they collapsed in 10 and from what I see 11. If 12 is going to be under budget by the amount I expect, it is going to be truly horrible.
ReplyDeleteWhat about circulation revenues at Detroit?
ReplyDeleteGreat reporting. Now, show the rest of them please.
ReplyDeleteThese reports do not disclose circulation revenue from subscriptions or rack sales for any newspaper.
ReplyDelete2:30 pm: This is part of the verification and trouble-shooting phase of any document-driven post. Profit margins for each of more than 80 papers are now queued up and ready to be published. Please check back periodically.
ReplyDeleteNo circulation revenues reported. And from an expense side this report only shows payroll expenses. There are many other expenses out there - distribution. printing, rent - just to name a few. Better hire a financial analyst so your reporting is effective.
ReplyDeleteBy the way, Jim, because of this terrific scoop, I'm now more convinced than ever that I want to have your babies!
ReplyDeleteVery interesting work.
ReplyDeleteWow!
ReplyDeleteJim,
ReplyDeleteIt's so refreshing to see that you give us, your customers, much more than "good enough is good enough" journalism!
Yes, Jim, thanks for publishing private financial information for all of our competitors, customers and the world to see. You and your mole have done Gannett a great disservice. Keep patting yourself on the back and telling yourself you are doing "God's work" as a "journalist."
ReplyDeleteYou likely sleep well at night, knowing your efforts are potentially biting the former hand that once fed you -- and could even lead to more people losing their jobs as the economic downturn continues.
Good job!
Jerk.
Profits are USA TODAY are also high. Just stunning that they are willing to risk so much credibility within the newsroom just to layoff 20 people because of some very shady reasons. Folks, it's not about the economy. Ken, sorry, but you're distorting the picture. Wall Street isn't to blame for this. Not this time. Not when you consider USAT is about to lose over 60 newsroom jobs in one year yet is still competing in circulation and revenue. Yup, this is the so-called flagship treating employees like idiots. Question is, are we going to take it?
ReplyDelete"Yes, Jim, thanks for publishing private financial information for all of our competitors, customers and the world to see. You and your mole have done Gannett a great disservice."
ReplyDeleteBiased much?
Gannett is run by a vicious bunch of sharks, and they've snuffed out more local media than any newspaper company I can think of. They provoke about as much sympathy as a bear trap.
Gannett's success has come largely through predatory, unfair and plain-old-evil practices against local media. We all know this. You know it. Leaking some information that the company is bleeding out from its bloated belly is fair game -- certainly no worse than what that company has done to take down its competitors.
I hate that good people will lose their jobs through the company's horrible mismanagement, but Jim is doing a HUGE favor to the rest of the journalistic community by reporting on exactly how mismanaged the Gannett actually is. If you work for Gannett, it's a great warning that this next round of layoffs isn't likely to be the last.
I say, "Let the truth be known!"
ReplyDeleteGreat job, Jim.
"Yes, Jim, thanks for publishing private financial information for all of our competitors, customers and the world to see. You and your mole have done Gannett a great disservice."
ReplyDeleteI have always loved how newspapers managers want us to get that kind of information on other companies for our reporting, but are Shocked! Shocked! to find out there's gambling here.
Jim,
ReplyDeleteI have been a supporter of yours, but I think this is over the line. The percentages you quote look off based on my knowledge and appear to be gross margins, not net. Gross helps support a business, but net is the cash left over after all expenses are deducted.
Also, GCI is huge on corporate allocations. Things like insurance, supplies and other shared services are passed through via corporate allocations.
You are running half cocked and this is a disappointing turn of events.
I don't believe I characterized these as gross or net; I'm using the term from the documents themselves: "newspaper profit margin."
ReplyDeleteSo what does do these numbers mean for Detroit? Have they always been that bad? Is that why they are tied to USAT? What's the word on layoffs there?
ReplyDeleteHunke and Moon are teflon. Shit these fuckers get away with a lot. Dubow is a pussy. He can't control Moon. Nice gash Dubow!
ReplyDeleteThese figures are no surprise given the economy that paper operates in. But the paper has something going for it that many Gannett papers do not -- a real chance at a Pulitzer this year. The mayoral stories have an excellent shot at the award for local reporting, the kind of work every paper should aim for. If Detroit wins, it won't save any jobs, but it would illustrate what can be lost when papers stop trying.
ReplyDeleteHoping Detroit survives is something to root for, not against. The bloodlust for job cuts everywhere gets to be a bit much on this board. We know people are hurting, and careers are ending; but wishing for layoffs in far-flung cities just to satisfy some fantasy of corporate justice helps no one.
If this economy continues to worsen, if we continue to shy away from difficult but valuable stories, if we never question why we give away our product for free, then none of our jobs will ever be safe, no matter where we work or how many trophies gather dust on the shelf. We need to think harder and act smarter about what we do for a living, lest we find ourselves with far less to give thanks for next year.
I agree with 11:54 pm on the Freep's amazing investigation of the city's now-convicted mayor.
ReplyDeleteDon't delude yourself about Gannett. The last Detroit paper to win a Pulitzer while it was owned by Gannett--The Detroit News in 1994--was sold by Gannett to MediaNews. (And the News won that Pulitzer after it was a finalist three other times while it was owned by Gannett.)
ReplyDeleteGannett also sold the Virgin Islands paper to a local businessman a few years after it won a Pulitzer.
And there are strong rumors that Gannett is nearly begging Dean Singleton, the owner of MediaNews, to take the Freep off its hands somehow. Gannett has a history of unloading interesting but not very profitable papers on MediaNews. It did so in El Paso, with the Detroit News and, I believe, with some tiny papers in Pennsylvania.
11:24 - that is VERY interesting - how good are your sources?
ReplyDelete